CMKM Diamonds Inc. (fka CMKX)

[pennypauly]

StockGate: Long ‘Censoring Arm’ of the Depository Trust Once Again Reaches Out, This Time To Halt CFA Society Event in Los Angeles

June 5, 2006 (FinancialWire) The Depository Trust and Clearing Corp. has once again extended its long arm of censorship, this time to “postpone” a panel discussion that had been scheduled tomorrow by the CFA Society of Los Angeles on the subject, “Exposing Systematic Fraud in The Stock Market.'' Such actions by the DTCC are no longer unexpected.

The panel had included Dr. Patrick Byrne, CEO of Overstock.com (NASDAQ: OSTK), one of numerous companies, such as Martha Stewart Living Omnimedia (NYSE: MSO), Global Crossing (NASDAQ: GLBC), and Antigentics (NASDAQ: AGEN), that have been on the “Regulation SHO” list for more than 200 days.

The “postponement,” at http://www.cfala.org/cfmfiles/cal/eventlist2.cfm?id=632&t=g&d=Z , is reportedly due to DTCC’s complaint that despite having been invited over a month ago, it could not get a “representative” to the event to counter any allegations.

The organization’s announcement had noted that the panel discussion and luncheon on June 6 offerered “a rare look into stock trading practices known as concerted failure-to-deliver (FTD) and naked short selling (NSS). By law, ‘short sellers’ are required to borrow and deliver the shares sold short within three days of sale. But reports indicate naked short selling may be widespread. DTCC allows electronic entry of shares in buyers' accounts despite sellers' failure to deliver.

“Dr. Patrick Byrne, CEO of NASDAQ-traded Overstock.com, will discuss his firm's buffeting by trading of "shares" that appear to outnumber those officially issued and outstanding. In March at a New York conference, Byrne named a dozen large brokerages with clients who claim several million more OSTK shares than the number held by the brokerages at DTCC.

“Dr. Susanne Trimbath, a Santa Monica research economist with operations management experience in clearing and settlement of trades at DTCC, will illuminate current trading practices.

“Portfolio manager and financial writer Arne Alsin will provide insights gained as an investor in large-lot trades in markets systemically flawed by FTDs.

“The panel will address the following questions: Are hedge funds and banker/brokers conspiring to swindle ordinary investors by failing to deliver shares sold short? Are self-regulatory organizations such as NASD ignoring concerns while industry-wide organizations like Depository Trust & Clearing Corporation (DTCC) aid the illicit activity? Are investors already exposed to such large losses that the SEC is frozen into inaction?”
CFALA is a non-profit membership organization established in 1931. Among its 1800 members are mutual fund and investment company in-house financial analysts and portfolio managers, banks, insurance companies and other buy-side firms, sell-side analysts, investment bankers and broker-dealers, investment advisers, academics, regulators, accountants, and investment consultants. CFALA is one of 131 member societies of the CFA Institute.

It is widely believed that last year the DTCC effectively scuttled a General Electric (NYSE: GE) “Dateline NBC” program at the last minute that had been a year in production, and which later was aired in a truncated version that avoided mention of the DTCC.

Even FinancialWire has experienced its fury. In a letter to this newswire’s attorney, Marshal Shichtman, Esq., it admitted to directly interfering in FinancialWire’s distribution on Yahoo (NASDAQ: YHOO) via Investors Business Daily. Despite warnings from Shichtman, the DTCC once again sought to interfere with another distribution, and even went so far as to contact the Financial Press in India, with the same salvo expressed elsewhere: “(Financial Express’) reliance on FinancialWire is unfortunate. It is not a legitimate news source.”

The globally-distributed FinancialWire, widely viewed as the “third newswire” behind Dow Jones (NYSE: DJ) and Reuters (NASDAQ: RTRSY) is edited by a team of ten professional reporters, who publish upwards of 1,500 news articles on a wide variety of financial subjects each month.

The DTCC also had castigated EuroMoney after a March, 2005 article on illegal naked short selling quoted then U.S. Securities and Exchange Commission Head of Market Regulation Annette Nazareth’s assistant, James Brigagliano that prior lawbreakers were “grandfathered” because “we were concerned about generating volatility where there were large pre-existing open positions, and we wanted to start afresh with new regulation, not re-write history.”

The DTCC, controlled by the NASD and the New York Stock Exchange, has more recently purportedly become the subject of subpoenas issued by a multi-state task force that is believed to be looking at the relationship of the DTCC’s “Stock Borrow” program to fails-to-deliver, which the DTCC admits to being $6 billion daily, which, while only a small percentage of each day’s trading, is enough to devastate hundreds of small public companies if misused.

The DTCC has had some successes in the courts, where famed lawyer John O’Quinn has been seeking to sue the entity over its “Stock Borrow Program,” which he considers to aid and abet
illegal naked short selling.

In the latest action, last Wednesday, the U.S. District Court in Las Vegas dismissed “with prejudice” Whistler Investment’s lawsuit against the DTCC and its subsidiaries. This is the fourth such dismissal.

The court agreed with the DTCC’s position and clearing and settlement rules are approved by the U.S. Securities and Exchange Commission, and thus “cannot be challenged under state law.” It said the DTCC’s Stock Borrow Program is”explicityly approved by and subject to the ongoing oversight of the SEC,” and thus legal challenge is barred by the Supremacy Clause of the U.S. Constitution, according to reports.

"We are very pleased that judges across the country continue to reject these meritless claims," said Larry Thompson, DTCC's General Counsel. "Last year, DTCC settled more than $1.4 quadrillion in securities transactions. We play a pivotal role in the U.S. capital markets by providing the capacity, certainty and reliability required to clear and settle today's enormous trading volumes and maintain the integrity and soundness of the U.S. capital markets. All of our operations and activities are carried out under SEC-approved rules and are subject to strict federal regulatory oversight. This arrangement ensures uniformity and accountability in clearing and settling securities transactions and, in turn, provides the stability that is essential to the efficient functioning of our capital markets."

For up-to-the-minute news, features and links click on http://www.financialwire.net
FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on http://www.investrend.com/contact.asp
For a free annual report on a company mentioned in the news, please click on http://investrend.ar.wilink.com/?level=279
The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: http://www.investrend.com/XmlFeeds?level=268